THIRD ADDENDUM TO STOCK PURCHASE AGREEMENT
This
THIRD ADDENDUM TO STOCK PURCHASE AGREEMENT
(this
“Addendum”)
is
dated as of September 14, 2007, by and among Appalachian Oil Company, Inc.,
a Tennessee corporation (the “Company”),
the
undersigned stockholders of the Company (collectively referred to herein as
“Sellers”
and
each individually as a “Seller”),
and Titan
Global Holdings, Inc., a Utah corporation
(“Buyer”).
RECITALS:
WHEREAS,
the parties have entered into a Stock Purchase Agreement dated July 17, 2007
(the “Stock
Purchase Agreement”),
pursuant to which Buyer agreed to purchase all of the issued and outstanding
capital stock of the Company, for the total consideration of thirty million
dollars ($30,000,000.00) (the “Purchase Price”) and on the terms and conditions
set forth in the Agreement; and
WHEREAS,
there has been a credit against the Purchase Price in the sum of one million
dollars ($1,000,000.00) as a result of certain non-refundable xxxxxxx money
deposits (the “Xxxxxxx Money”) already paid to Sellers in connection with the
Stock Purchase Agreement; and
WHEREAS,
the Company owns certain marketable securities in the amounts and accounts
(the
“Securities”) as set forth on Schedule
A
attached
hereto, and Buyer wishes to liquidate the Securities and/or distribute some
or
all of the Securities to Sellers following the Closing of the Stock Purchase
Agreement, with the proceeds from such sales and/or distributions to be paid
to
Sellers by Buyer as consideration for Sellers’ Company stock; and
WHEREAS,
the parties desire to amend the Stock Purchase Agreement as set forth
below.
NOW,
THEREFORE, for and in consideration of the foregoing recitals, and other good
and valuable consideration, the receipt and legal sufficiency of which are
hereby acknowledged, the parties agree as follows:
ARTICLE
I
1.1 At
the
Closing of the Stock Purchase Agreement, the Buyer shall pay to the Sellers
the
total sum of Twenty Six Million, One Hundred Eighty One Thousand, Nine Hundred
and Five Dollars ($26,181,905.00) via wire transfer, which amount reflects
a
credit for Sellers’ receipt of the Xxxxxxx Money, as well as an additional
credit against the Purchase Price in the amount of Two Million, Nine Hundred
Eighteen Thousand and Ninety Five Dollars ($2,918,095.00), or the Agreed Value
of the Securities (as defined below) less One Hundred Thousand Dollars
($100,000.00).
1.2 The
parties agree that the Securities have a current market value of approximately
Two Million, Nine Hundred Eighteen Thousand and Ninety Five Dollars
($2,918,095.00) (the “Agreed Value”).
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1.3 Immediately
following the Closing of the Stock Purchase Agreement, Buyer and the Company
shall take all actions necessary for the sale of the Securities, with the
proceeds from such sale to be paid to the Sellers by the Escrow Agent (as
defined below), on behalf of the Buyer, as consideration from the Buyer to
the
Sellers for the purchase of the Company stock, as set forth below. Provided,
however, that at the request of the Sellers, the parties agree that some or
all
of the Securities may be distributed in kind to the Sellers by the Escrow Agent,
in the sole discretion of the Sellers, subject only to the agreement of Buyer,
the Company and Sellers with respect to the value of such Securities upon
distribution to the Sellers.
1.4 To
effect
the sale (and/or distribution in kind, as applicable) of the Securities
contemplated by Section 1.3, at the Closing of the Stock Purchase Agreement,
the
Securities shall be placed into an escrow account with Aldebaran Financial,
Inc.
as escrow agent (the “Escrow Agent”), pursuant to an Escrow Agreement to be
agreed upon by the parties (the “Escrow Agreement”). The Securities shall be
sold by the Escrow Agent (and/or distributed in kind to Sellers) pursuant to
the
joint instructions of the Buyer, Sellers and the Company, as set forth in the
Escrow Agreement, with the sale of the Securities to be completed no later
than
ten (10) business days following the Closing of the Stock Purchase Agreement.
Upon the Escrow Agent’s sale of any of the Securities, the proceeds from such
sales shall be distributed to the Sellers via wire transfer, pursuant to
Sellers’ instructions, subject to the adjustments contemplated under Section 1.5
below. If the Escrow Agent distributes any of the Securities in kind to the
Sellers, then said Securities shall be delivered to the Sellers’ pursuant to
Sellers’ written instructions. It is the parties’ intention that the sale
(and/or distribution in kind, as applicable) of the Securities shall be executed
expeditiously, but in such a manner as to maximize the value of the Securities
to the mutual benefit of the parties.
1.5 In
the
event that the total proceeds of the sale (and/or distribution, as applicable)
of the Securities are less than Two Million, Eight Hundred Eighteen Thousand
and
Ninety Five Dollars ($2,818,095.00), then the Buyer and the Company, jointly
and
severally, shall promptly, but in no event later than ten (10) days thereafter,
pay to the Sellers the shortfall, that is, the amount by which the sale proceeds
are less than $2,818,095. On the other hand, in the event that the proceeds
of
the sale (and/or distribution, as applicable) of the Securities are greater
than
Two Million, Eight Hundred Eighteen Thousand and Ninety Five Dollars
($2,818,095.00), then the Sellers, jointly and severally, shall promptly, but
in
no event later than ten (10) days, pay to the Company the excess, that is,
the
amount by which the sale proceeds are greater than $2,818,095.00.
1.6 It
is the
intention of the parties that the sale and/or distribution of the Securities
shall be completely “tax neutral” to the Sellers, and that any tax losses or
gains from the sale and/or distribution of the Securities shall be for the
account of the Company. For this reason, the Securities shall continue to be
held under the Federal Employer Identification number of the Company, unless
they are distributed to Sellers, whereupon the Buyer and Company agree to take
all steps reasonably necessary to facilitate the transfer and delivery of the
Securities to the Sellers. It is also the intention of the parties that the
sale
and/or distribution of the Securities shall be deemed part of the aggregate
Purchase Price, paid by Buyer to Sellers as consideration for Sellers’ Company
stock. If for any reason any taxes should be imposed on Sellers as a result
of
the sale of the Securities, or as a result of Sellers’ receipt of Securities in
kind from Buyer or the Company, then the Company and Buyer jointly and severally
agree to indemnify Sellers for any such taxes. The Company and Buyer shall
also
be responsible for all fees, commissions and other expenses associated with
the
Escrow Agent’s sale and/or distribution of the Securities.
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ARTICLE
II
2.1 Section
2.3 of the Stock Purchase Agreement, as amended, is hereby amended by deleting
from clause (a) thereof “September 12, 2007” and inserting in its place
“September 14, 2007.”
ARTICLE
III
3.1 The
Buyer
hereby waives the condition precedent set forth in Section 8.3 of the Stock
Purchase Agreement to the extent that the consents of Yum Brands, Citgo and
Western Union are not obtained prior to the Closing Date. Further, the Buyer
hereby waives the conditions precedent set forth in Sections 8.5 and 8.14 of
the
Stock Purchase Agreement.
ARTICLE
IV
4.1 This
Addendum shall be construed in accordance with the terms and conditions set
forth in the Stock Purchase Agreement, and any capitalized terms set forth
in
this Addendum that are not defined herein shall have the meaning set forth
in
the Stock Purchase Agreement. As amended hereby, the Stock Purchase Agreement
shall remain in full force and effect.
4.2 This
Addendum shall be governed by, and construed in accordance with, the laws of
the
State of Tennessee applicable to agreements made and to be performed
therein.
4.3 Any
action or proceeding seeking to enforce any provision of, or based on any right
arising out of, this Addendum may be brought against any of the parties in
the
courts of (a) the State of Tennessee, County of Xxxxxxxx, or, if it has or
can acquire jurisdiction, in the United States District Court for the Eastern
District of Tennessee. The parties hereby consent to the jurisdiction of such
courts (and of the appropriate appellate courts) in any such action or
proceeding and waive any objection to venue laid therein. Process in any action
or proceeding referred to in the preceding sentence may be served on any party
anywhere in the world.
4.4 This
Addendum and all of the provisions hereof shall be binding upon and inure to
the
benefit of the parties hereto and their respective heirs, executors, personal
representatives, assigns, and successors to the business and assets of such
parties.
4.5 Each
of
the parties hereto shall hereafter, at the reasonable request of the other
party
hereto, execute and deliver such further documents and agreements, and do such
further acts and things as may be necessary or expedient to carry out the
provisions of this Addendum.
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4.6 This
Addendum constitutes a complete statement of all of the arrangements between
the
parties with respect to the transactions contemplated by this Addendum, and
supersedes all prior agreements and understandings with respect to such
transactions between them, except for the Stock Purchase Agreement and the
amendments thereto. This Addendum shall not be amended or terminated except
by
an instrument in writing signed by the parties hereto.
4.7
This
Addendum may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the
same
instrument.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
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IN
WITNESS WHEREOF, the parties have executed and delivered this Addendum as of
the
date first written above.
COMPANY:
|
APPALACHIAN
OIL COMPANY, INC.
By:
/s/Xxxxxxx
X. Xxxxxxxx
Name:
Xxxxxxx X. Xxxxxxxx
Title:
President
|
|
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SELLERS:
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BUYER:
|
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THE
XXXXX X. XXXXXXX REVOCABLE TRUST
By:
/s/Xxxxx
X. XxxXxxx
Name:
Xxxxx X. XxxXxxx
Title:
Trustee
|
By:
/s/
Xxxxx X. Chance
Name:
Xxxxx X. Chance
Title:
President and Chief Executive Officer
|
|
/s/
Xxxx X. XxxXxxx
XXXX
X. XXXXXXX
by
Xxxxxxx X. Xxxxxxxx under Power of Attorney
dated
7-11-07)
|
|
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/s/Xxxxxxx
X. Xxxxxxxx
XXXXXXX
X. XXXXXXXX
THE
XXXXX X. XXXXXXX IRREVOCABLE TRUST
By:
/s/
Xxxx X. XxxXxxx
Name:
Xxxx X. XxxXxxx
Title:
Trustee
(by
Xxxxxxx X. Xxxxxxxx under Power of Attorney
dated
7-11-07)
|
|
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